Kalamazoo-Portage has the potential to be a hotbed for exporting by 2020, a national study finds

Jennifer Harnish / Gazette FileLocal officials tour Pfizer Inc.'s manufacturing site in Portage in this Jan. 23, 2008 file photo. A new study indicates there is significant export growth potential for U.S. metro areas that already have chemicals as their largest export industry.

KALAMAZOO -- Kalamazoo County has the potential to be a hotbed for exporting, according to a study commissioned by the U.S. Conference of Mayors that was to be released Friday morning.

Kalamazoo-Portage is one of 40 metro areas nationwide expected to experience significant growth in international exports from 2011 to 2020.

The area ranked 113th in the nation in terms of its potential for exports from 2011 to 2020.

The exporting of chemicals accounted for 44.7 percent of the area’s foreign exports, according to a study done for the Conference of Mayors by Denver-based IHS Global Insight. In a report titled "U.S. Metro Economies: Exports in the Next Decade,"data forecast 79.5 percent growth in chemical industry exports by 2020.

“Chemicals includes everything from pharmaceuticals to fertilizers and some plastics,” said Karl Kuykendall, a Lexington, Mass.-based economist with IHS. He helped conduct the research.

“Any metro area that has a large chemical industry will rate near the top of this list,” he said of export growth potential.

Jonathon Gruenke / Gazette FileKalamazoo Mayor Bobby Hopewell, left, and Portage Mayor Pete Strazdas, right, are shown at an April 14 meeting last year of local government officials.

In Kalamazoo, where pharmaceutical exporting accounts for about 45 percent of the all foreign exporting, “that bodes really well for the area,” he said.

An identical 79.5 percent growth potential was anticipated for other metro areas that have a large pharmaceutical industry presence, including St. Louis, Durham, N.C., New Haven, Conn., and the nation’s No. 2 exporter overall, the Houston area.

Manufactured products is considered the largest export of the New York/New Jersey, which is the No. 1 exporting metro area in the country. It accounts for 18.9 percent of that area’s exports, according to IHS. It has the potential to grow exports by 65.7 percent by 2020, versus the 79.5 percent in Kalamazoo/Portage and other large pharmaceutical-producing areas.

Kalamazoo Mayor Bobby Hopewell said that although he has not yet seen the data, he is not surprised by the findings.

“This community has always had a strong sense of manufacturing so it does not surprise me that this would be an area that we would be seen as experts in, and as a growth opportunity for our region, our state and our country.”

Portage Mayor Pete Strazdas, who said Thursday that he had seen some of the data, said the growth potential does not surprise him either.

“It doesn’t surprise me that with our pharmaceutical base in this area that we are up there in the numbers,” said Strazdas, speaking particularly of pharmaceuticals maker Pfizer Inc. and medical technologies maker Stryker Corp., which each have a huge footprint here. “What intrigued me was the growth potential. What we know is that when a community exports, there is great opportunity to increase the economic vitality of the region. In essence, the more stuff we export, the more job opportunities, the stronger the community.”

He said that while he thinks local and state policies are becoming more helpful for businesses and that should support exporting, he thinks federal policy is headed in the wrong direction.

He said Pfizer will struggle with a national health care policy that increases corporate taxes and Stryker will struggle with a new excise taxes on its products, slated to start in 2013. The excise tax, which Stryker’s management has said will add significant cost to its products, was among the catalysts for the company announcing last year a restructuring and a plan to reduce its worldwide work force by 5 percent.

Strazdas said municipalities are working to keep millage rates low, improve schools and maintain a good quality of life. He said the state administration has revamped the Michigan Business Tax and appears to be headed in a good direction. But he said federal policies that make it costlier to do business here will stop more companies from manufacturing here and, thereby, hinder exports.

The U.S. Conference of Mayors was to begin a two-day leadership meeting Friday in Jacksonville, Fla., to develop an agenda to grow exports and improve the infrastructure for exporting and importing goods. They were expected to push to redirect dollars used for wars to support expanded railways, roads, bridges and ports.

The meeting was to be hosted by Jacksonville Mayor Alvin Brown, who is chairman of the Conference’s newly formed Task Force on Metro Exports and Ports.

Kuykendall said the export study is a forward-looking expansion on exporting data the IHS provided to the Conference of Mayors in January. He said earlier data offered an historical perspective on exporting among cities.

In its report, IHS notes that only about 1 percent of the small businesses in the U.S. export overseas and 58 percent of those export to only one other country. The Conference of Mayors is looking to improve those stats.